Indian Government Launches RELIEF Initiative to Support Exporters Amid Global Trade Disruptions
Introduction to RELIEF Initiative
To protect Indian exporters from the escalating disruptions in global trade due to the ongoing conflict in West Asia, the Indian government has introduced a strategic support initiative. This program, named Resilience & Logistics Intervention for Export Facilitation (RELIEF), aims to alleviate the challenges faced by exporters. The increased security issues surrounding the Strait of Hormuz have resulted in vessel rerouting, extended shipping routes, congestion at transshipment points, and emergency surcharges linked to the conflict. These factors have raised logistics expenses and introduced operational uncertainties for export shipments heading to or passing through the affected areas.
Details of the RELIEF Initiative
RELIEF is a focused, time-sensitive intervention under the Export Promotion Mission (EPM), with a financial allocation of Rs 497 Crores. The Ministry of Commerce and Industry has outlined how RELIEF will protect the interests of Indian exporters. The initiative consists of three key components aimed at consignments directed towards countries in the region, including the United Arab Emirates, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran, and Yemen, whether for delivery or transshipment.
ECGC Ltd. (formerly known as Export Credit Guarantee Corporation of India Ltd.) has been appointed as the primary agency responsible for verification, claims processing, disbursement, and monitoring. They will implement a dashboard-based system for real-time tracking of claims and fund usage.
Components of the RELIEF Initiative
The three components of RELIEF include:
- Exporters who have secured ECGC credit insurance for eligible consignments will receive up to 100% risk coverage beyond their existing ECGC protection during the eligible period from February 14, 2026, to March 15, 2026, ensuring enhanced security without extra financial strain.
- Exporters planning shipments in the next three months (March 16, 2026, to June 15, 2026) will be encouraged to obtain ECGC coverage with government support for up to 95% risk coverage, which will help maintain exporter confidence and facilitate ongoing shipment flows despite logistical uncertainties.
- Recognizing that some MSME exporters may not have credit insurance but are facing significant freight and insurance surcharges, RELIEF includes a partial reimbursement mechanism (up to 50%) for eligible non-ECGC-insured MSME exporters, subject to specific conditions and verification, with a cap of Rs 50 lakhs per exporter. This support aims to provide timely relief against rising logistics costs due to the conflict.
Creation of War-Risk Fund
Additionally, the Indian government is considering establishing a dedicated Rs 1,000 crore fund to assist insurers providing war-risk coverage for vessels navigating through high-risk areas like the Strait of Hormuz. This proposal, currently under evaluation by the finance ministry, seeks to fill the growing gap in insurance availability. As global reinsurers withdraw from the region due to increased risks, the cost and difficulty of insuring cargo transport have surged.